Android Assault on iPhone Market Continues

Piper Jaffray believes that Apple won't ship its fifth generation-iPhone until late in the September-ending quarter. "We recently spoke with an iPhone manufacturing equipment supplier who indicated that orders for new equipment are several months later than usual," Munster and Murphy wrote.

Apple shipped an impressive 16.9 million iPhones in the first three months of this year, according to Gartner Relevant Products/Services. The downside for Apple, however, is that 36.2 million Android-based smartphones shipped in the first quarter -- up from 8.36 million units one year earlier.

Android's steep rise suggests that Apple's hold on the leadership position in the smartphone Relevant Products/Services application Relevant Products/Services space is slipping. If past history is any indication, however, Apple may begin offering the iPhone 4 at a reduced price after the new iPhone 5 launches later this year, noted Gartner Research Vice President Carolina Milanesi.

"Apple has been decreasing the price of the previous generation device Relevant Products/Services when the new one launched so I would expect a similar trend this time around," Milanesi said in an email Friday. "It will depend what kind of [iPhone 5] improvements we will see as to how much discount we will see on the iPhone 4 and indeed if the 3GS will continue to ship."

LTE On The Backburner

Still, Apple will need to do more to keep from eventually being overwhelmed by Android's startling growth, which rose 36 percent year-over-year in the March ending quarter. By contrast, Apple's iPhone shipments grew 16.8 percent growth during the same period, according to Gartner.

Earlier this month, Google Relevant Products/Services said it was activating over 400,000 Android-based handsets on a daily basis, and with more than 100 million devices based on Google's mobile Relevant Products/Services platform already in play. Android Market is also growing rapidly. Over 200,000 free and paid applications were available in Android Market as of May 10, with more than 4.5 billion applications already installed on handsets worldwide.

One looming issue that gives Android-based handset makers a potential edge is the wireless Relevant Products/Services industry's ongoing transition to LTE. According to Piper Jaffray, LTE modems currently consume too much power Relevant Products/Services to meet Apple's battery Relevant Products/Services life requirements, and hence are "not likely be in the next iPhone," noted the firm's analysts Gene Munster and Andrew Murphy in a note released Thursday.

Still, Apple expressed no sense Relevant Products/Services of urgency when the topic came up during the company's conference Relevant Products/Services call with investors last month. "The first generation of LTE chipsets force a lot of design compromises with the handset, and some of those, we are just not willing to make," Apple CEO Tim Cook said.

Delayed iPhone 5 Launch

Apple's postponement of its iPhone 5 launch from the usual early June release date gives Android-based handset makers an opportunity to make short-term market-share Relevant Products/Services gains at Apple's expense. Piper Jaffray expects Apple to sell 16 million iPhones in the June ending quarter, versus the 16.9 million iPhones Apple in prior quarter, according to Gartner.

Piper Jaffray believes that Apple won't ship its fifth generation-iPhone until late in the September-ending quarter. "We recently spoke with an iPhone manufacturing equipment supplier who indicated that orders for new equipment are several months later than usual," Munster and Murphy wrote.

Earlier this week, Gartner noted that a 13 million unit bump in global Relevant Products/Services handset inventories occurred in April due to an overstocking of the channel in response to the earthquake and tsunami that hit Japan, which "caused an initial panic over shortages," Milanesi observed. However, what happened in "Japan does not seem to have impacted Apple," Milanesi said.

Still, Piper Jaffray thinks it's possible that supply Relevant Products/Services issues related to Japan's earthquake and tsunami had affected Apple's hardware Relevant Products/Services ramp for the iPhone 5. Alternatively, dithering over whether to support Relevant Products/Services LTE or add an audio codec socket might have contributed to the delay as well as having to deal with software Relevant Products/Services-driven features not "fully-baked" in time to permit a normal June release. On the other hand, the analysts added, "we have no tangible insight as to which one or group of these reasons caused the slip."